Team Vermont in Acronym City

Acronym city

The spring meeting of the NAIC just concluded in Phoenix this week, and as usual our stalwart group of captive insurance sentinels were on hand to carefully monitor the activities that might impact captives.  Representing Team Vermont was Commissioner Susan Donegan, Deputy Commissioner Dave Provost, Director of Captives Sandy Bigglestone, and of course, VCIA’s own Jim McIntyre.

The Principle-Based Reserving Implementation (EX) Task Force Executive (EX) Committee considered the adoption of PBR Review (EX) Working Group Report and received an update on PBR progress from the Life Actuarial (A) Task Force, as well as other written updates on the XXX/AXXX Reinsurance Framework Charges.

The Risk Retention Group (E) Task Force discussed a number of items, including revisions and the applicability of? RRGs to?of annual disclosures and reporting regulations. They instructed NAIC staff to draft a number of comment letters to the Financial Regulation Standards and Accreditation (F) Committee on the following issues:

  • stating its opinion that the Corporate Governance Annual Disclosure Model Act (#305) and the Corporate Governance Annual Disclosure Model Regulation (#306) should not be required for risk retention groups (RRGs) for accreditation purposes and explaining their reasons, including the Model Risk Retention Act’s (#705) corporate governance provisions;
  • stating its opinion that the 2014 revisions to the Annual Financial Reporting Model Regulation (#205) should not be required for RRGs for accreditation purposes and explaining the reasons therefore;
  • stating its opinion that the 2014 revisions to the Insurance Holding Company System Regulatory Act (#440) would likely never apply to an RRG, as it would not fit the definition of an “internationally active insurance group.”

The RRG Task Force also discussed the reference to “captive” RRGs in the Review Team Guideline within the financial analysis procedure that is specific to RRGs, and decided: 1) it will be discussed further on a future conference call; and 2) that the Model Risk Retention Act (#705) should apply to both RRGs organized under a state’s captive statutes, as well as those organized under a state’s P/C statutes.

The Financial Regulation Standards and Accreditation (F) Committee, whose mission is to establish and maintain standards to promote sound insurance company financial solvency regulation through the NAIC’s accreditation program, took time to discuss the proposed Preamble that would include, in the scope of the Accreditation Program, captive insurers and special purpose vehicles that assume business written in accordance with Regulation XXX, Regulation AXXX, variable annuities and long-term care insurance. The Committee discussed comments received and instructed NAIC staff to revise the Preamble to clarify that these are the only type of captives (other than risk retention groups) to be included in the scope of the Accreditation Program. The Committee is considering holding an interim meeting prior to the Summer National Meeting to discuss this issue further.

Jim McIntyre’s full report  on  these committee and other issues that impact captives will be available to our members at in the coming days.

Richard Smith,
VCIA President


We took our “World Famous Road Show” to Boston earlier this week (well, actually Cambridge) which always gives us a great opportunity to provide a mini “Captives 101” to those both interested in the industry and those currently in the industry looking for some hand’s on education while networking with peers. Boston is a good market for us as it is a relatively short drive and it’s chock full of great people and businesses.

Our first panel consisted of Andy Sargeant from USA Risk and the usual team of Dave Provost, Vermont’s chief captive insurance regulator, and Dan Towle, director of financial services, for those of you who don’t know them. Dave always has a slide with some connection between Vermont and the places where we host our Road Shows. On this occasion, he showed a number of prominent Boston-area buildings that use Vermont granite and a picture of Calvin Coolidge, who was Governor of Massachusetts before becoming President: Vermont’s gift to U.S. history.  Of course, Silent Cal (as he was known), as a pro-business President, would be proud of Vermont’s captive insurance success story!

On our second panel, we had three captive owners with very different organizations and captive histories. Michael Crasnick is Vice President Underwriting of Elm Insurance Company, the wholly-owned single parent captive of GE.  Formed in 1983 as Vermont’s 12th licensed captive (we are now past 1000!) Elm provides highly customized, cost effective, and expert claims handling services. GE has effectively used Elm over the years to underwrite a number of specialty lines policies, as well as facultative reinsurance contracts.

Ellen Varney, CFO of Controlled Risk Insurance Company of VT (CRICO), a risk retention group comprised of Harvard Medical School and a number of Boston-area hospitals and their affiliates, was formed in response to the medical professional liability crisis. Its mission is to provide medical malpractice insurance to their members and assist them in delivering the safest health care in the world.  Ellen’s description on the way CRICO has improved safety in their member hospitals over the past 20 years through the reinvestment in long-term loss prevention and patient safety was astounding.

And Dan Richards is CEO of Global Rescue LLC, which formed a captive in Vermont about five years ago.  They have provided travel risk and crisis management services to enterprises and consumers since 2004, getting people and institutions out of places or situations around the world 24/7. Their clients include everyone from Deutsche Bank, to the U.S. Ski Team, to National Geographic.  They performed over 1200 operations in 2013 alone!

Pretty cool stories from a very diverse group of captives.  Who said captive insurance was boring!  Thank you all very much and I look forward to hearing from you!